Bluefly.com Reports Strong Third Quarter Results; Online Retailer Significantly Strengthens Infrastructure for Fourth Quarter
BusinessWire, Wednesday, November 03, 1999 at 16:17
NEW YORK--(BUSINESS WIRE)--Nov. 3, 1999--Bluefly, Inc. (NASDAQ
SmallCap: BFLY), a leading online outlet for designer fashions and
home furnishings (www.bluefly.com), announced today that its gross
quarterly revenue from product sales, exclusive of shipping and
handling and before returns and allowances, increased by over 17% to
$1,216,000 in the third quarter of 1999, from $1,035,000 in the second
quarter of 1999. During the quarter, the Company also completed a
number of initiatives designed to increase its capacity during the
holiday shopping season and thereafter.
Initiatives completed by Bluefly during the third quarter in
anticipation for the holiday shopping season include the transition to
a larger, more robust fulfillment center, the creation of an in-house
customer service department that operates seven days a week, the
implementation of real-time credit card authorization and fraud
screening software, the installation of additional servers to speed
the Web site's response time, and the construction and installation of
additional photo studio space to allow for increased speed in styling,
photographing and processing new product. In addition, the Company
more than doubled its inventory during the quarter and raised the
number of designers whose products are offered on the Web site to over
200, with approximately 100 more designers to be added during
November.
"We are extremely pleased with our third quarter results and the
improvements we have made to our infrastructure and our merchandise
selection over the past few months," said Ken Seiff, Chief Executive
Officer of Bluefly. "Our revenues grew nicely and our number of
registered users more than doubled to approximately 190,000 from
approximately 85,000. All of this was accomplished despite the
seasonal slow down in traffic growth on the Internet during the summer
months, transitional issues relating to the fulfillment center which
resulted in certain lost sales and our decision to reduce
significantly our print advertising in the third quarter while we
prepared for the upcoming holiday season," added Seiff.
Commenting on Bluefly's bulked up infrastructure, Seiff said,
"online shoppers have made clear that they expect much more than a
flashy Web site and a novel marketing idea this Christmas -- they
expect great selection, full service and prompt delivery in a
convenient and professional manner. In our view, the winners in the
e-commerce sector will be the companies that can deliver on these
expectations, and we believe that all of our hard work over the past
few months has significantly strengthened our position in this area."
Bluefly also announced that it had ramped up marketing and
advertising efforts for the holiday season. "Our first radio
advertising campaign launched in New York on Monday, and we have
greatly expanded our print media placements over the past few weeks,
with even more expansion to come in November and December," said
Seiff. "We are extremely excited about the opportunity that we have
created to capture market share and mind share during the fourth
quarter," added Seiff.
Bluefly is a NASDAQ SmallCap public company headquartered in New
York City at the intersection of Fashion Avenue and the Information
Superhighway. Distinguishing itself with discounts of up to 75%,
products from over 200 designers and a 90 day money back guarantee,
Bluefly.com aims to be the world's first full service outlet store for
designer fashions. Its innovative MyCatalog feature is designed to
eliminate the "hit-or-miss" aspect of off-price shopping by allowing
shoppers to see only those products that are available for sale and
match their interests. The online merchant has established strategic
alliances with many of the most visited Web Sites and portals
including AOL, Excite, Go Network, Lycos, MSN, Netcenter, Tripod,
Women.com and Yahoo!. For more information, visit www.bluefly.com.
*T
Bluefly, Inc.
Summary Financial Highlights
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998(a) 1999 1998(a)
---- ------ ---- ------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $873,000 $4,000 $1,909,000 $4,000
Cost of sales 656,000 $53,000 1,454,000 53,000
-------- ------- ---------- --------
Gross
profit (loss) 217,000 (49,000) 455,000 (49,000)
Selling, marketing
and fulfillment
expenses 2,674,000 203,000 6,301,000 329,000
General and
administrative
expenses 1,003,000 230,000 2,016,000 676,000
Internet start
up costs -- 224,000 -- 327,000
---------- ------- --------- -------
Operating
loss from
continuing
operations (3,460,000) (706,000) (7,862,000) (1,381,000)
Interest income 111,000 30,000 294,000 111,000
---------- -------- --------- ---------
Loss from
continuing
operations (3,349,000) (676,000) (7,568,000) (1,270,000)
----------- --------- ---------- ----------
Income (loss)
from
discontinued
operations -- 51,000 63,000 (1,149,000)
----------- --------- ---------- ----------
Net loss $(3,349,000) $(625,000) $(7,505,000) $(2,419,000)
============ ========== =========== ===========
Basic and diluted
(loss) income per share
(after preferred
stock dividends)
Continuing
operations (.71) (.25) (1.62) (.47)
Discontinued
operations -- .02 .01 (.38)
Estimated loss
on disposal -- -- -- (.04)
-------- ------- --------- ---------
Net loss
per share $ (.71) $ (.23) $ (1.61) $ (.89)
======== ======= ========= =========
Weighted average
shares
outstanding 4,901,749 2,717,788 4,763,074 2,705,994
========= ========= ========= =========
(a) Bluefly.com opened its virtual doors to the public on September
8, 1998. Prior to the launch of Bluefly.com, the Company marketed
a collection of golf sportswear. In June 1998, the Company
decided to discontinue the operations of its golf division and
devote all of its energy and resources to building Bluefly.com.
As a result, the majority of financial results for 1998 relate to
the discontinued golf division, and comparisons of 1999 amounts
to 1998 amounts should be regarded accordingly.
Note: In an effort to more appropriately reflect the results of
its operations, the Company has reclassified certain items in its
Statement of Operations, including (without limitation) gross sales
and net sales, which have been reclassified to exclude shipping and
handling revenue. It is management's opinion that these
reclassifications better reflect the economics of the Company's
business and serve to provide for easier comparison with its peers in
the industry. These changes had no impact on current or previously
reported income (loss).
SELECTED BALANCE SHEET DATA
September 30, 1999
Cash $12,847,000
Inventories 4,454,000
Other Current Assets 875,000
Property and equipment, net 892,000
Total Current Liabilities 2,942,000
Shareholders' Equity 16,149,000
KEY METRICS Third Second
Quarter Quarter
1999 1999
Average Monthly Unique Visitors
(based on Media Metrix information) 271,000 369,000
Registered Users 190,355 85,370
Average Order Size $ 100 $ 103
*T
This press release may include statements that constitute
"forward-looking" statements, usually containing the words "believe",
"project", "expect", or similar expressions. These statements are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements inherently
involve risks and uncertainties that could cause actual results to
differ materially from the forward-looking statements. The risks and
uncertainties are detailed from time to time in reports filed by the
company with the Securities and Exchange Commission, including Forms
8-A, 8-K, 10-QSB, and 10-KSB. These risks and uncertainties include,
but are not limited to, the following: the competitive nature of the
business and the potential for competitors with greater resources to
enter such business; risk of litigation for sale of unauthentic or
damaged goods and litigation risks related to sales in foreign
countries; consumer acceptance of the Internet as a medium for
purchasing apparel; the Company's limited working capital and need for
additional financing; recent losses and anticipated future losses; the
startup nature of the Internet business; the capital intensive nature
of such business (taking into account the need for advertising to
promote such business); the dependence on third parties and certain
relationships for certain services; the successful hiring and
retaining of personnel; the dependence on continued growth of online
commerce; rapid technological change; year 2000 issues; online
commerce security risks; governmental regulation and legal
uncertainties; management of potential growth; and unexpected changes
in fashion trends.
CONTACT: Bluefly.com
Patrick Barry, CFO
212/944-8000 x239
E-mail: pat@bluefly.com
or
Jon Freedman, Dir. I.R.
212/944-8000 x247
E-mail: jfreedman@bluefly.com
KEYWORD: NEW YORK
INDUSTRY KEYWORD: RETAIL APPAREL/TEXTILES INTERNET E-COMMERCE
ADVERTISING/MARKETING EARNINGS
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